PART ONE: TOWARD A NEW ECONOMIC PARADIGM

Background: Over the past several years the Economics Working
Group has brought together participants holding a variety of
perspectives on the environment and the economy. One outcome has been
a draft of a General Agreement on a New Economy (GANE), posited on
the need for fundamental conversion of the economy away from an
emphasis on growth in GNP and unsustainable consumption toward a
full-employment economy that provides work and builds healthy,
sustainable communities. It is a beginning, not a final answer.

This document is being developed as an evolving vehicle for public
dialogue. It has been updated prior to and distributed at a number of
national conferences over the past 10 months to get feedback. In the
coming year, we hope to engage an even broader constituency in this
dialogue. Once there has been sufficient public agreement on the
goals, principles and program elements of GANE, there will need to be
federal legislation to set the gears in motion.

Problem: The GNP-growth/consumption/competition basis of
the present economy generates increasing levels of global production
that are environmentally unsustainable. Further, this growth model
has not been able to ensure employment for all who want and need it.

Job creation in the United States is being slowed by the
cumulative effects of corporate restructuring and large scale
layoffs, the increased reliance on temporary and contract workers to
replace permanent workers, the transfer of production overseas in
both the manufacturing and service sectors, the increasing use of
technology to replace human labor, and the impact of global trade and
technological unemployment and decreased employment in the public
sector. In the present model, unless rapid growth takes place,
increased labor productivity leads to fewer jobs. Yet this model
stands largely unchallenged as the basis for the operation of today's
market economies that are increasingly linked into a global economy.

While increased labor productivity brings with it the potential
for higher wages and a shorter work week, global competition has
forced down wages while spurring still more labor productivity. Under
this system, the U.S. must increase its market share of existing
products or market new products through successful competition in the
global marketplace at the same time that Japan and the newer economic
"tigers" are increasing their production. This creates an upward
spiral of production and consumption that feeds the unsustainable use
of natural resources.

If there were international environmental standards for material
and energy use requiring that products are durable, repairable,
reusable, recyclable and energy efficient, would corporations simply
manufacture new needs and produce new products? How, instead, could
the productivity of our work force be refocused on creating
sustainable communities?

In addition to unsustainable levels of consumption and the need
for rapid growth to prevent job loss, the present model also leads to
loss of the richness of diverse economic and social structures
grounded in other cultural values. We have belatedly learned the
value of ecological diversity. Will it be too late when we understand
the value of economic and social diversity? Will we be able to devise
another basis for robust economic activity that produces needed work
not grounded in rampant consumerism?

Any transformation to a sustainable, full employment economy is
made more difficult by the inflation fearmongering that raises
interest rates, inhibits fiscal policy initiatives, and makes
investment funds difficult to obtain, especially for those who are
not wealthy. While part of the needed transformation may be
implemented through non-market initiatives and generation of local
capital, fiscal and monetary policy are still relevant. However, with
the globalization of the market economy, Keynesian strategies no
longer provide a satisfactory basis for national job creation
policies.

Such a transformation is also made difficult by the need for
investment funds. Can initiatives that would create such work attract
sufficient private investment by yielding competitively high returns?
If not, how can the public sector provide them?

A new vision of work and jobs, based on sustainable livelihoods,
and a new structural framework are needed, one rooted in safe and
rewarding work, the sustainable use of resources, and healthy
communities. The bottom line is that communities cannot be sustained
unless they can provide a secure, ongoing means of livelihood for all
citizens and unless their resource base is protected.

Historical Perspective: The original debate on full
employment in 1945-46 raised many of the same questions and solutions
as today: a shorter work week at the same wages, work sharing,
non-monetary rewards for work sharing, greater structural adjustment
funding, and sharing productivity gains on a more equitable basis.

Beyond these similarities, the globalization of business and the
urgent requirement for environmental sustainability represent
qualitative differences from the situation in 1945. With 700-750
million unemployed people in the world and the U.S. economy no longer
relatively isolated as it was after World War II, growing numbers of
Americans have become part of the global labor pool.

These changes require that the original full employment concept,
which focused on maximizing employment and income through rapid
economic growth, be reconceptualized to incorporate environmental
sustainability and reflect the reality of globalization. This is the
challenge the working draft of GANE seeks to meet by proposing steps
that will:

Enable us to convert from a growth-based economy to a
sustainable economy;

Create institutions at the local, regional, and national
levels that can provide a democratic basis for planning this
conversion;

Place clear constraints on corporate behavior to facilitate
this conversion;

Provide funding to implement this conversion; and

Replace the GNP/GDP with a new measure of well-being based on
indicators of environmental, social and economic health and
sustainability.

Toward coalition: The process of developing a new economic
vision --one that promotes environmental sustainability and useful
work with a liveable income --provides a vehicle around which the
energy of people from many different communities and constituencies
can rally. Implementing elements of such a vision is obviously a very
significant challenge, but one that has the potential to unite those
who feel the growing threat to their livelihoods and their
communities of the present path. It can be successful if it draws
together diverse advocates and people from many walks of life. With
these considerations in mind, we have developed GANE for the purpose
of generating discussion and obtaining feedback on ways to begin
creating a new approach to our political economy. We hope you will
share your thoughts with us.

PART TWO: GENERAL AGREEMENT ON A NEW ECONOMY

I. DECLARATION OF GOALS AND PRINCIPLES
We, the undersigned, in order to reclaim our economy and government
so that they serve our needs and those of future generations in a
sustainable manner, are committed to rebuilding our economy from the
ground up and endorse the goals and principles set out below.

GOALS FOR THE NEW ECONOMY

To achieve full employment by providing an ongoing means of
livelihood for all job seekers.

To protect and restore the environment for present and future
generations.

To ensure healthy communities based on the sustainable use of
local resources for local consumption and regional trade, the
availability of meaningful work and the opportunity for creative,
diverse cultural expression;

To measure the success of the economy by the improvement in
the well-being of all people and the development of healthy,
vibrant, diverse communities, rather than by the total monetary
value of economic activity whether or not it contributes to the
general welfare and protects the environment.

To achieve these goals -- Clearly defined local, regional, and
national public functions are needed that will assist the market
economy through democratic processes, regulatory mechanisms and
provision of public funding. More specifically, all levels of
government need to take actions that will accomplish the following:

Ensure that all job seekers can obtain work commensurate with
their skills, earn adequate income to live above the poverty
level, have healthy working conditions and, when unemployed, have
the necessary income support, education and training to secure
such work.

Stimulate and encourage local and regional economic activities
that foster environmentally sustainable development of healthy
communities and regions.

Identify ways to compensate individuals performing socially
useful work that is not presently compensated by the market
economy.

Prevent supranational decisionmaking by multinational
corporations from undercutting local, regional and national
efforts to achieve environmental sustainability and full
employment.

Minimize the adverse effects of economic activity on
ecological systems and subsystems.

Remove tax incentives and other subsidies that encourage job
relocation to other regions and countries and/or promote
destruction of ecological diversity and unsustainable use of
natural resources.

Establish mechanisms to retain more capital within the U.S.
for investment in sustainable communities and for creating
opportunities for related work.

Because the GNP/GDP only measure total economic activity, they do
not reflect the changes in well-being of the population or the impact
on the environment. They should be replaced by a new index that
measures sustainable well-being that includes disaggregated
components.

A. COMPONENTS OF INDEX

Economic welfare. This component includes quantifiable
indicators of unemployment and underemployment, income inequality,
wages in relation to a liveable income, and contributions to
social well-being through unpaid services.

Environmental sustainability. This component reflects
the availability of non-polluted water, air and soil; protection
and restoration of specialized ecosystems such as wetlands;
sustainable use of non-renewable and renewable resources,
including farm land; retention of biodiversity; protection of the
biosphere; and the equitable access to such environmental
amenities.

Social well-being. This component reflects levels of
personal, family and community health, education and general
welfare for all residents and the degree of equity in relation to
women, minority populations, youth and the elderly.

B. USING THE INDICES TO ASSESS THE NATIONAL ECONOMY

Presidential Report. The President should prepare and
submit to Congress at the beginning of each session an annual "Report
of the President on Sustainable Economic Development and Employment"
which sets forth a detailed assessment for the previous fiscal year
of progress toward full employment and sustainability, including the
following:

a full report on the indices, with the value of each
contributing indicator being reported separately, along with the
net change from previous years;

a description of how the previous year's public policy
initiatives have changed the indices.

C. REGIONAL AND LOCAL INDICES

In order to measure progress at the regional and local levels in a
manner most appropriate to such areas, indices should be developed
locally that reflect the goals established for environmental
sustainability and full employment in these areas. Such indices
should supplement the national index and be reviewed at the national
level in preparing the President's annual report on the economy. An
assessment should be made as to whether any new measures should be
incorporated into the national index.

Structural changes are required in government institutions and the
private sector in order to achieve these goals. Such changes should
promote the strategic focus of federal, regional and local activity
on achieving full employment, equity and sustainability. They should
also ensure full local participation in the process.

It is especially important to ensure that private investments,
especially those made by the largest corporations which control the
major share of America's investment capital, contribute to the
improvement in the index. This should be implemented through
corporate charters tied to corporate, community and regional
sustainability plans as set out in subsection D below.
A structure of "community federalism" in which national, regional and
local planning and program implementation begins at the community
level allows residents to have a direct stake in the operation of
government. At each level, a democratic process needs to be in place.
Criteria including environmental protection, preservation of stable
communities, creation of humane work environments, inclusive public
participation in the planning process and equitable sharing of
benefits should be incorporated into the planning process at all
levels.

A. ESTABLISHMENT OF PROCESS TO ACHIEVE
SUSTAINABLE COMMUNITIES

The first step in moving toward sustainable communities is to
develop a shared vision for the sustainable future of the community,
building on efforts in Chattanooga and other communities. This
process needs to provide all members of the geographic community with
an opportunity to speak and be heard. While visioning allows for the
free flowing of ideas, it also involves consolidation and selection
of primary goals.

During this process, some specific issues should be raised
relating to the creation of sustainable communities. These include
the following:

ways to meet identified local needs including educational and
employment opportunities, public safety, child and elder care,
family stability and public health; to enhance community
diversity; and to provide opportunities for creativity;

use of durable, reusable, repairable, recyclable goods;
maximization of energy efficiency; and use of renewable energy
resources;

protection and restoration of local and regional native
ecosystems so they can be as self-sustaining as possible;

elimination of health hazards associated with use of toxic
substances and disposal of hazardous and medical wastes;

ways to more equitably distribute work, income and
productivity gains.

By working with the private and public sectors to develop and
realize their local vision, residents can then develop specific plans
and projects to achieve full employment, meet identified needs and
make their area sustainable.

To implement the vision, a democratic process that fairly
represents all sectors of the community should be established to
translate the vision into local sustainability and employment
initiatives and to guide their implementation with ongoing full
public participation.

Whatever process is adopted, there needs to be a means for
prioritizing implementation steps based on the contribution to
sustainability and the opportunity for meaningful work by local
residents. This may involve establishing local enterprises, creating
public employment, undertaking work-related training programs, and
providing services to meet unmet needs in the community.

Innovative ways to finance these efforts will be needed. Local
venture capital can be redirected toward local projects, as occurred
in Chattanooga after their visioning process. Community banks and
revolving loan funds can be established using local savings and taxes
and philanthropic gifts. The use of local currency for the bartering
of labor (LETS and Time Dollars are already implemented in a number
of communities) can also play an important role.

Local financing should be supplemented by federal funds allocated
on an equitable basis. Such funding should reflect severity of local
problems including unemployment and underemployment, differences in
available natural resources and environmental degradation. In this
way, federal taxes can actually help people create the kind of
community they want.

In the event private initiatives are not sufficient to meet
prioritized needs, the community should consider whether it wants to
allocate a portion of available investment funds for public
institutions capable of providing the services and/or goods.

B. ESTABLISHMENT OF REGIONAL SUSTAINABLE
DEVELOPMENT PROCESS

As each community strives to become sustainable, some of the
social and environmental costs of economic activity may fall outside
the community, requiring an examination of whether the region as a
whole is becoming sustainable. Equally important, the protection of
ecological entities such as watersheds, which are not confined to
individual communities, needs to be addressed on a regional basis.
There are also appropriate regional roles for implementation of
sustainable practices.

A regional mechanism is needed to perform the following functions:

examine the net regional effect of local sustainability
efforts using regional measures similar to the national indices;

protect the regional ecology;

promote sustainability initiatives with associated work
opportunities and training most appropriate at the regional level;
and

provide technical assistance to local communities.

Such initiatives should reflect the same goals and special
considerations noted in Section III-A. Federal funds should be
provided to regional bodies charged with the development and
implementation of regional sustainability initiatives that supplement
and complement local efforts.

C. THE FEDERAL ROLE IN COMMUNITY
FEDERALISM

While initiatives should be based at the local level, the federal
role is essential to the overall success of building a sustainable,
equitable, full employment economy. The federal government has three
major functions.

One is to remedy ecological and social problems arising from past
and ongoing unsustainable activities. This calls for a continuation
and expansion of present federal functions, such as the following:

Ensuring the clean-up of privately and publicly generated
pollution and preventing ongoing pollution; and

Protecting workers and providing appropriate assistance for
those for whom the present economic system does not generate
sufficient work at liveable wages or who are unable to work.

The second function is to assist in the conversion to sustainable
economic activities. This includes federal funding of the community
and regional efforts described above; setting appropriate standards
based on feedback from the local and regional levels; and assessing
national progress toward sustainability, equity and full employment.

The third function is to ensure that multinational corporations
are not allowed to undermine efforts at building sustainable
communities and regions. Existing federal policies should be reviewed
and those that encourage such activities should be repealed or
revised. Future policies, including tax and investment policies, and
negotiation of international agreements should include provisions to
prevent such damaging activities.

Federal funds are needed to ensure regions have sufficient
resources to carry out their functions; to provide income and
services for those unable to work; to help create a sustainable
infrastructure, with expenditures accounted for in a capital budget;
and to pursue research and development of sustainable approaches to
the provision of goods and services.

Federal funds are needed to supplement community investment funds
in order to provide an ongoing means of livelihood for all job
seekers; to provide income and services for those unable to work; to
help create a sustainable infrastructure, with expenditures accounted
for in a capital budget; and to pursue research and development of
sustainable approaches to the provision of goods and services. Per
capita federal funding to local communities should begin with small
amounts to allow the local processes to become established without
being distorted by the promise of large inflows of funds.

Establishment of Council for a Sustainable, Full Employment
Economy and other appropriate bodies

A Council for a Sustainable, Full Employment Economy and other
appropriate bodies should be established and given the necessary
authority by Congress to carry out federal functions in converting to
a sustainable economy in keeping with the local and regional
functions described above.

These bodies should be responsible for identification of a
consistent program for promoting the goals of the new economy through
federal fiscal and monetary policy; research and development
priorities; trade and labor policies; resource development and
conservation policies; environmental, energy and transportation
policies; national security policies; and public investments in
natural resource conservation and in fixed and human capital. This
program should contribute to the President's budget submission for
the next fiscal year and should be reflected in proposed changes to
the tax code.

Specifically, the council and other such bodies should perform the
following functions:

Establish [or recommend to Congress] minimum sustainability
standards with appropriate statutory guidance to be applied in
local and regional implementation plans and private sector
activities.

Propose national economic policies that support sustainable
communities and regions without inflation and make recommendations
regarding public expenditures and other fiscal policies to the
President and the Congress, including prioritization of R&D; needs
that promote sustainable technology and other economic activity.

Review regional sustainability plans and their implementation
to assess their impact on sustainability and employment, ensure
coordination among regions, identify federal impediments to such
regional planning, and recommend any needed changes in national
policy to facilitate regional planning and implementation.

Examine the extent to which federal activities are conducted
in accordance with the following principles and recommend needed
changes in federal procurement policies, including the following:

use of products that are reusable, repairable and durable
and ultimately recyclable;

use of best available technology for energy efficiency and
for sustainable use of renewable energy resources;

use of best available technology to eliminate the use of
toxic chemicals and for approaching zero discharge of toxic
chemicals and other pollutants.

Recommend additional measures necessary to ensure adequate,
stable local and regional investment for full employment,
including the regulation of corporate activity. Consideration
should be given to innovative ways to provide investment capital
at the local and regional levels in order to create work that will
meet identified local and regional needs.

Consider options such as reductions in total working hours and
increased work sharing with full benefits and sabbaticals in order
to distribute available work more equitably.

Examine the extent to which the export of capital has resulted
in inadequate national investment for full employment and
sustainability. Special attention should be given to manufacturing
and services that can be easily relocated to other countries and
potentially lead to a loss of up to one-third of U.S. jobs.
Recommend measures that will help to preserve the integrity of
regions and communities in the face of such movement of capital,
including ways to encourage local self-reliance.

Ensure that employment opportunities and related training are
fully available to women, minorities, youth and older residents
and that sustainable development financing has been made available
on an equitable basis.

Conduct the research necessary to determine the index in order
to track overall progress toward these goals and make all such
determinations publicly available.

The Council, in conjunction with other bodies as appropriate,
should develop and provide to the President an annual plan which is
supportive of local and regional initiatives and reflects the above
considerations.

IV. PRIVATE SECTOR
MECHANISMS FOR INCREASING SUSTAINABLE WELL-BEING
Corporations should be held publicly accountable for contributing to
the country's sustainable well-being. All private investments,
especially those by the largest corporations, should contribute to
local and regional efforts to achieve sustainability and full
employment.

1. Corporate charters

a. Accountability. In the U.S., corporate charters were originally
granted by states under strict control of state legislatures with
limited duration and clear public purpose. Today, the public purpose
of contributing to a sustainable economy should be included in all
corporate charters. Specifically, corporate charters should require
corporations to operate in conformance with sustainable practices and
community sustainability plans. Further, there should be a specific
requirement to develop and implement corporate sustainability plans
as outlined in Section 2 below.

b. Federal charters. Since multinational corporations are
chartered in one state but conduct much of their corporate activity
in other states and nations, a federal chartering process should be
established to ensure accountability. This should include the
rechartering of existing multinational corporations. Federal charters
should be subject to a sunset provision which requires periodic
rechartering to ensure ongoing public accountability.

c. Enforcement. In the event that a corporation has failed to
comply with the terms of its charter, most states provide for
judicial review and dissolution of the corporation under specified
conditions. For instance, "New York State requires dissolution when a
corporation abuses its power or acts 'contrary to the public policy'
of the citizenry." (quoted from "Taking Care of Business" by Richard
Grossman and Frank Adams.) Once federal chartering is enacted, a
grievance process should be established that allows the public to
bring lack of compliance to the attention of the federal chartering
agency which should have the authority to take appropriate legal
action in federal court, including the revocation of the charter.

2. Sustainability and employment plans

All corporations having a significant impact on local and/or
regional sustainability should be required to prepare and implement a
sustainable production and product design plan that includes the
following:

a. Contribution to and conformance with sustainability plans for
communities and regions in which the corporation is located,
including the provision of enhanced employment opportunities;

b. Steps to

achieve the reuse of all materials and make products reusable,
repairable, durable and recyclable;

preserve and restore the ecological integrity on farmlands,
forests and rangeland and water bodies by harvesting renewable
resources such as timber, fish and crops on a sustainable yield
basis and engaging in sustainable ranching practices;

c. Participation in planning for local and regional industrial
ecology zones geared to maximize recycling among industries and
communities, to minimize waste, and to protect and restore ecological
integrity;

d. Implementation of best available pollution-reduction and energy
efficiency technologies and specific plans for approaching zero
discharge of toxic chemicals and other pollutants and maximizing
energy efficiency.

Such plans should be developed jointly by management and trade
union or elected worker representatives. There should also be a
permanent process in place to provide for worker-management
cooperation relating to the implementation of the plans and the
provision of sustainable jobs that provide a secure means of
livelihood, full benefits at liveable wages, an improved quality of
life, and protection of the local and global environment. Such plans
and reports on their implementation should be reviewed by designated
public bodies.

3. Public subsidies of corporate activities

a. Local. A local public subsidy of private corporate activity
should be treated as an agreement between the community and the
corporation which provides economic development and employment in
return for the subsidy. If a business has benefited from special tax
waivers and/or specific public infrastructure improvements such as
roads and sewers and fails to abide by the agreement (e.g.,
relocating its operations before an agreed upon period has expired),
it should repay the entire subsidy along with an appropriate penalty.

b. State and Federal. Any public subsidy of economic activities in
the private sector should be premised on a clearly defined social
purpose and should be evaluated by whether the subsidy is necessary
to increase the index.

To the maximum extent possible, full employment should be achieved
within the private and non-profit sectors through work that improves
sustainable well-being. Any shortfall in such work opportunities
should be met by the public sector and should be part of the federal,
state or local budget. However, policies must be in place that will
ensure that the public sector is not being forced to substitute for
the loss of private sector jobs when private investments are shifted
to locations with unsustainable economies due to cheap labor and/or
weak environmental regulations.

As a general rule, full employment should be ensured through
permanent employment in the private and non-profit sectors and public
institutions; however, temporary public sector employment should also
be used to provide counter-cyclical employment or to deal with other
temporary conditions such as plant closings.

B. CREATION OF HEALTHY COMMUNITIES

The index will be significantly increased by creating work that
enhances educational opportunities, public safety, child and elder
care, family stability, public health, community diversity and
creative expression.

C. JOB AND COOPERATIVE WORK TRAINING

In order to ensure full employment and increase the index, job and
cooperative work training programs are needed so workers can fill
jobs or establish cooperative workplaces to meet identified needs.
Further, to increase economic equity, employment opportunities and
related training must be made fully available to women, minorities,
youth and older residents.

D. PROVISION FOR THOSE UNABLE TO WORK

Any job-seeker who is unable to perform satisfactorily in a normal
work environment, as defined in the Americans With Disabilities Act,
should be offered employment in a sheltered workshop or other special
employment program that addresses the job-seeker's particular
incapacity. Whenever possible, the goal of such sheltered workshop or
other special employment program should be to prepare the job-seeker
to function in a normal work environment. Such programs should be
established in local communities with technical and financial
assistance from the regional and federal levels.

E. INCOME MAINTENANCE

An income maintenance program that provides income at a level
comparable to moderate wage levels is needed for those who are unable
to work or who are providing unpaid services (e.g., homebound child
care) which increase the index more effectively than such work paid
for within the market.

F. CHANGES IN HOURS WORKED

There should be an examination of ways to better distribute work
in the economy and to make available time for non-market work
activities. The following approaches should be considered as a basis
for federal policy:

gradual decrease in the length of the work week, such as 2.5%
per year, with no decrease in inflation-adjusted wages;

rewards for increased work sharing, including retention of
benefits by each participant; and

sabbatical years for all workers to promote lifelong learning,
retraining and career mobility and to increase the equitable
distribution of work.

G. RETENTION OF INVESTMENT CAPITAL AND STRATEGIC DEVELOPMENT OF
WORK OPPORTUNITIES THAT CONTRIBUTE TO SUSTAINABLE WELL-BEING

Existing laws and regulations that encourage relocation of jobs to
other countries and export of capital should be repealed or revised.
At the same time, policies need to be developed that encourage
investment in products and services that enhance local employment and
resource use and contribute to sustainable well-being.

A network of local and regional public sustainable loan funds
should provide funding for the implementation of local and regional
plans. Capitalization for these banks should come from both public
funds and private sector funding; however,in order to strengthen
communities, pooling of local funds in community-owned revolving loan
funds should be encouraged so that such funds can be reused within
the community. Banks, through the Community Reinvestment Act, can
also contribute to local funds. such funds can be supplemented by the
federal per capita payments to communities.

Regional loan funds should be developed for more capital intensive
and/or regionally appropriate endeavors. The Community Reinvestment
Act should be expanded to include mutual stock and bond funds and
other financial instruments, with revenues going to regional funds.

A combination of investment incentives and public regulation
should is needed to encourage additional private investments.

Other federally funded loan funds, such as the microloan programs
under Housing and Urban Development (HUD) and the Small Business
Administration in the Department of Commerce, should be operated in
conformance with local and regional plans.

Both private and public sector pension funds should be invested in
local and regional sustainability loan funds.

B. FEDERAL BUDGET

The President's annual federal budget should be designed to
achieve the goals and carry out the policies set forth above and to
overcome market failures.

1. Use of federal funds

a. Supplemental federal funds should be provided to the
appropriate community and regional entities charged with the
development and implementation of local and regional sustainability
plans. Such funds should be allocated on an equitable, per capita
basis, with adjustment for income, unemployment and underemployment
within the area and for differences in local resources and severity
of environmental and social problems.

b. The federal government should also assist in funding the
creation of a sustainable infrastructure, with such expenditures
accounted for in a capital budget. This includes support for a
transportation system for goods and people using non-polluting,
primarily renewable, fuels and water supply and sewage systems.

c. Federal funds should be provided to ensure full employment,
income maintenance and provision for those unable to work as set
forth in Section IV-D above.

d. Research and development funding should be targeted to further
the creation of sustainable approaches to the provision of goods and
services, where there are significant gaps between what is
theoretically achievable and what is available. Product and service
development resulting from such R&amp;D should not be subject to
intellectual property rights. Special attention should be paid to the
following:

development of durable, repairable, reusable, recyclable,
energy-and-water-efficient goods and their use in all sectors of
the economy;

maximization of energy efficiency and use of renewable energy
in construction, manufacturing, transportation and by all sectors
of the economy;

modernizing older primary manufacturers for increased
efficiency in use of natural resources and decreased use of toxic
substances through the expansion of Manufacturing Technology
Centers;

sustainable agriculture techniques including organic methods,
prevention of soil erosion and salinization, expansion of crop
diversity, and decreased use of energy, minerals and ground and
surface water;

basic research on environmental sustainability, including
methods of restoring impacted habitats and ecosystems so they can
function in a self-sustaining manner to the maximum extent
practical.

2. Sources of federal funds

a. Decrease in defense spending. With the end of the Cold War and
the profound change in the international security environment,
substantial additional reductions (on the order of $100 billion) in
U.S. defense spending can be achieved and should be used to promote
the goals of this program through public investment initiatives,
rather than being used for further deficit reduction.

b. Decreases in social welfare costs. The achievement of full
employment with liveable wages will generate additional tax dollars
and will free up additional billions of dollars now spent for income
assistance, housing and food subsidies, and for costs related to
social disintegration (e.g., incarceration). It is essential that
employment has to come before cuts in social welfare programs.

c. Increased revenues from public resources. Additional revenue
should be obtained via full-cost pricing of publicly-owned natural
resources that are leased or sold and elimination of public subsidies
for the unsustainable use of private resources.

3. Capital investment accounting

To achieve an expansion of public investment in sustainable
infrastructure and overcome resistance to such investments created by
the existing fiscal deficit, federal budget accounting procedures
should distinguish between capital investments that contribute to a
future revenue stream and other expenditures.

C. TAX POLICIES

As a general principle, pollution, unsustainable consumption and
natural resource depletion should be taxed as an alternative to
relying primarily on taxation of human resources in the form of work,
e.g., the payroll tax. Compensating policies need to be in place to
ensure that the net effect of federal tax policy is progressive. A
progressive capital gains tax should be used to shift a portion of
investment funds from the global marketplace to local communities
through the per capita community payments and use of community
revolving loan funds.

Among specific tax changes that need to be considered are the
following:

Taxation of environmental and social externalities and
resource depletion. To properly reflect the full cost of producing
goods and services, the negative environmental and social costs
need to be incorporated into the price. This can be done by taxing
these costs which are presently treated as externalities. In
addition, the taxation of non-renewable resources such as coal and
oil will lead to a more efficient use of these resources. The oil
depletion allowance that encourages non-sustainable use of natural
resources should be eliminated.

Reversal of accelerated depreciation and shortened tax lives,
which provide tax advantages for machinery and other fixed capital
assets and encourage rapid substitution of capital for labor.

Elimination of the foreign investment tax credit, which
encourages the relocation of jobs to other countries.

Given the reality of the global economy where investments can be
made wherever labor and environmental protection costs are lowest,
the goals of GANE cannot be fully achieved without action taken at
the transnational level.

International agreements should protect the right of workers to
associate freely, organize, bargain collectively, strike, and work in
a healthy and safe environment with full disclosure of occupational
hazards and exposures.

The federal government should develop a set of minimum
environmental standards that would be incorporated into all
international agreements and would promote the harmonization of
environmental regulations on an international basis. These standards
should encourage the development of safe and environmentally
sustainable production practices.

Alternative language to consider is as follows:
They should also allow countries to refuse to import products not
manufactured in compliance with minimum national environmental
standards for safe and sustainable production practices in effect in
the importing country.

The U.S. government should take the lead in creating a United
Nations Code of Conduct for Transnational Corporations. Such a code
should be adopted by state and federal governments in their
provisions for the chartering of corporations and by local
governments to prevent destructive bidding wars between localities as
they seek new corporate investments.

Through ongoing dialogue with groups and individuals around the
country, GANE will continue to evolve. We hope this will stimulate
creative thinking about our shared future. For more information or to
share your perspectives, we can be reached at: